How to tell potential score increase

[Anonymous]

Would like to hear your reasoning about settling a debt becoming a long term negative.

[SouthJamaica]

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@Anonymous wrote:
Would like to hear your reasoning about settling a debt becoming a long term negative.

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They sometimes call it a "charge off", a "modification", etc. They have various code names for settlements which can keep your scores low for a long time. 

[Anonymous]

Not from my observations. My chargeoff changed status and the balance was updated to $0 and my scores have increase pretty significantly due to that. I gained +10pts once it changed status and another +10pts once it was changed to $0.

Also, a Charge off is not a settlement. A settlement is due to a charge-off. Ideally, you want to dispute or request deletion for payment but that is nearly impossible when dealing with the original creditor. 

[SouthJamaica]

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@Anonymous wrote:

Not from my observations. My chargeoff changed status and the balance was updated to $0 and my scores have increase pretty significantly due to that. I gained +10pts once it changed status and another +10pts once it was changed to $0.

Also, a Charge off is not a settlement. A settlement is due to a charge-off. Ideally, you want to dispute or request deletion for payment but that is nearly impossible when dealing with the original creditor. 

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There is not the kind of consistency in reporting these types of events which you suggest.

They might list a settlement as a chargeoff, or as something else.

In your case the settlement is reported as a settlement. Which is a long term negative.

[Anonymous]

It’s reported as a settlement and will stay in the credit as long as every other negative which is 7 years.

[SouthJamaica]

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@Anonymous wrote:
It’s reported as a settlement and will stay in the credit as long as every other negative which is 7 years.

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..... confirming what I said earlier: "2. If you "settle" a debt you can wind up with a long term negative."

Whatever name the creditor chooses to assign to it -- and there are many -- the result is the same.

[Anonymous]

Versus a short term negative would be what exactly?

[Anonymous]

For the record, there aren’t short term or long term negatives when it comes to credit. They all stay on your credit for 7 years from the date of first delinquency.

[Anonymous]

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@Anonymous wrote:
For the record, there aren’t short term or long term negatives when it comes to credit. They all stay on your credit for 7 years from the date of first delinquency.

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I think what was being referred to would be "major" verses "minor" negatives.  Both will impact scores for the full 7 years, but with different potency.  A major will typically only lose 1/3 of it's sting during the first 2 years, with 2/3 of the initial sting sticking around until it's gone at 7 years.  Conversely, a minor will typically lose 2/3 of it's sting during the first 2 years, with 1/3 of the initial sting lasting until dropoff at 7 years.

[Anonymous]

Based on what parameters?